What is "socially responsible investing" focused on?

Socially responsible investing (SRI) is centered on the principle of balancing financial returns with positive social and environmental impacts. Investors who engage in SRI seek to generate profit while also considering how their investments affect society and the planet. This approach emphasizes aligning investment decisions with personal values or ethical standards, leading to a portfolio that not only aims for economic gain but also prioritizes sustainability and social good.

This method goes beyond traditional investing by assessing companies based on their moral and environmental practices. For example, investors may choose to avoid companies involved in activities such as fossil fuels, tobacco, or weapons manufacturing, while seeking out those that actively promote renewable energy, social justice, or community development.

Options that focus solely on maximizing financial returns, evaluating art and cultural investments, or restricting investments to specific government bonds do not align with the philosophy of socially responsible investing, as they do not incorporate the critical component of ethical consideration alongside financial performance.